Professional M&A Services Take The Worry Out Of Buying Or Selling A Business
What do you do when you unintentionally create a successful business? Accidental entrepreneur Jim Bell faced that very situation when his side job turned into a thriving company. Most people would jump at the chance to own and operate a profitable venture, but it was never the desire of Bell or his wife, Diane, to be tied to a small business 24/7.
It was 10 years ago when Bell started working for an employment agency in Utah. After working there for four years he left the company and worked with Deseret Industries, where he helped place people in good jobs, matching business owners to reliable employees. With his expertise in the industry, his past customers thought he should start his own staffing organization.
That was six years ago. Since then, his company has become very successful, bringing in millions of dollars in annual revenue. As he was still with Deseret Industries, Bell’s wife took over running the company.
“We’d never done this before,” Bell says. “We were not serial entrepreneurs. We were naïve and, looking back, we learned a lot of hard lessons.”
After several years, the Bells were at a crossroads, deciding if they wanted to expand their business or sell it. After analyzing the different factors, they determined that selling would be the best action.
But how does one go about selling a business? The Bells decided to seek professional help in selling the thriving company and contacted Chuck Berg, a senior associate at CBC Advisors. Berg, who has been in the mergers and acquisition business since 1981, helped them figure out an asking price for their business and showed them how to create an appealing package of information to present to potential buyers. He told the couple it could take anywhere from nine to 12 months to find a buyer and complete the sale, but once the business was listed, the Bells immediately had several letters of intent.
Working with Berg, the Bells ended up selling their business to a company out of Pennsylvania. “We were told this never happens. It never works this way,” Bell says. “In less than three months from the time of the listing, we closed on the deal. … We never would have made that contact on our own. In the end, the right company bought it and everyone was happy with the results.”
For business owners considering the sale of their company, Bell suggests the following steps to make sure the process goes without a hitch:
- Make sure the financials are in order. Keep the company’s books clean and up-to-date. Financials are one of the first things requested by an interested buyer.
- Keep the bottom line as healthy as possible. Investors want the business to show a track record of reliable profitability.
- Use a broker. “I had people tell me, ‘Those brokers don’t bring any value. They’re worthless.’ I disagree. We never would have made contact with [our buyer] without a broker,” Bell says.
THE PERSONAL TOUCH
Berg says he loves making those connections. As an M&A expert, he helps business owners in all kinds of situations and has been a key player in the merger, sale or acquisition of companies across all industries. The worldwide contacts of CBC Advisors allow advisors like Berg to leverage international reach to match sellers and buyers in industries like energy, technology, healthcare, manufacturing and more.
“CBC Advisors has a presence all 50 states. We cover the nation and the world, from fertilizer plants in Oregon to genetics testing services in the UK. When you go in as the CBC Advisors’ M&A team, everyone sits up and pays attention,” he says.
Bruce Sternke, vice president of M&A for CBC Advisors, considers himself a matchmaker—and he takes that role seriously. The person-to-person contact involved in a merger or acquisition is a large component of how he does business.
“There’s still an old-fashioned feel to what we do. Shaking hands and making eye contact is very significant,” Sternke says. “We deal in trust. We’re being entrusted with their future well-being and it’s imperative to get them a good value.”
To sustain its reputation, CBC M&A Advisors only sells businesses with a good track record and history of profitability. Most clients come to the organization through referrals. “We feel the commitment of CBC Advisors will expand our buyers and offer resources to help our clients succeed even more,” he says. “Primarily, we only represent businesses that have value.
The people who come to us know they’re going to see a good business from us.” The people coming to CBC Advisors—whether buyers or sellers—come with a wide variety of needs and perspectives. Lately, many customers are baby boomers getting ready to sell off their business and retire. Or sometimes the client has taken a business as far as they can and is hoping to bring in expertise and experience to grow the company to the next level. That can mean an infusion of capital for new facilities, equipment or staff; new management with a vision for growth; or geographic or product diversification.
Sternke also sees a lot of buyers in their mid-30s through 50s who enjoyed success when they were younger and are looking to buy a business for a new challenge.
At the end of the day, whether it’s working through a family business succession plan or connecting profitable companies to interested buyers, the organization’s reputation ensures the participating parties will find success.
“I realized what value there is in CBC Advisors and what they bring to the table,” Bell says. “The biggest thing is their name: Coldwell Banker Commercial. There are other brokers out there who send out flyers that get tossed, but with CBC Advisors, people tend to pay attention.”